(Na0.5K0.5)NbO3 with Bi0.5(Na0.97K0.03)0.5TiO3 with x≤0.05 has been prepared by the conventional mixed oxide process. X-ray diffraction analysis revealed that, during sintering, all the Bi(Na0.97K0.03)TiO3 diffuses into the lattice of (Na0.5K0.5)NbO3 to form a solid solution with a perovskite structure. A morphotropic phase boundary (MPB) between orthorhombic (O) and rhombohedral (R) was found at the composition 0.98(Na0.5K0.5)NbO3-0.02Bi0.5(Na0.97K0.03)0.5TiO3 [abbreviated as 0.98NKN-0.02BNKT] with correspondingly enhanced dielectric and piezoelectric properties. For 0.98NKN-0.02BNKT ceramics, the electromechanical coupling coefficients of the planar mode kp and the thickness mode kt reach 0.33 and 0.49, respectively, after sintering at 1100 oC for 3 h. The ratio of the thickness coupling coefficient to the planar coupling coefficient is 1.48. With suitable Bi0.5(Na0.97K0.03)0.5TiO3 concentration, a dense microstructure and good electrical properties are obtained.